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The new German coalition government will abolish unemployment benefits (and introduce a Citizen’s benefits)

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Citizen’s benefits income instead of unemployment benefits II: Real reform or a nicely colored name? The new German coalition government wants to abolish Hartz-IV – and replace it with basic income security. It sounds like a fraudulent relabeling.

Will unemployment benefits (Hartz IV) soon be history? At least the hated unemployment benefits II (ALG II) might be replaced by a a Citizen’s benefits income. However, the criticism quickly outweighed the initial cheers. Because most ALG II recipients suspect that the SPD, FDP and Greens plan is being whitewashed. “It’s just a new name, but the inhumanity remains,” complained a user on Twitter. “Hartz IV is only being relabeled,” said another. But what is really behind the reform?

Financial aid for the unemployed:Unemployment benefit II (called Hartz 4)
Introduced:January 1, 2005
Legal basis:Second book of social legislation

The SPD, FDP and Greens agreed to give Hartz IV a facelift at coalition exploratory talks – provided the respective party bodies agree. An exploratory paper serves as the basis for the decision, in which the introduction of a new citizen allowance was agreed.

Citizen's benefits

Citizen’s benefits instead of Hartz IV: German coalition government promises to abolish the previous system

With the announcement of this plan, the negotiators immediately caused a stir in the network. Above all, the term “Bürgergeld” stimulated the imagination. After all, it sounds like all citizens are now simply getting money from the state. 

Immediately the first complained that it was not called gender-fair citizenship allowance. But the anticipation of government grants did not last long. Citizens’ benefits have nothing to do with an unconditional basic income, which is paid out equally to every German and every German regardless of wealth.

The citizens’ benefit is intended to replace the previous basic security for the unemployed. In doing so, the SPD, FDP and the Greens are largely following their promises made in their respective election programs.

Basically, the new system should “respect the dignity of the individual, enable them to participate in society and be digitally and easily accessible”.

Where do the German political parties stand on unemployment benefits?

Citizen's benefits

5 of the 6 political parties represented in the Bundestag have made the unemployment benefits (Hartz IV) reform a focal point, only the AfD has currently not submitted any new proposals. From a renaming to Bürgergeld, to higher additional earnings limits, to a complete abolition – the proposals are very different in nature, as the overview shows.

1. SPD

According to the “future program” of Chancellor candidate Olaf Scholz , the Hartz IV system is to be converted into a citizen’s money. The party does not provide any information on how high the benefits are. But it should “suffice for a life in dignity” and also enable a broken washing machine to be repaired, as they say. At the same time, the SPD wants to abolish the control of the financial situation of new beneficiaries in the first two years and increase the savings, i.e. the savings that do not have to be offset against the standard rate. If an ALG II recipient refuses to work, cuts in the basic security should remain possible.

2. CDU

The Union also wants to adhere to the principle of “promoting and demanding”. Armin Laschet’s election platform continues to advocate the possibility of sanctions *. The amount of the standard rate remains the same for the time being, but unemployed people should be able to earn more money in addition to the basic security without compromising. In addition, the CDU is relying on an expansion of the qualification offers.

3. Greens

Chancellor candidate Annalena Baerbock has promised the abolition of Hartz IV. A so-called “guarantee protection” is intended to replace the previous system. It should be higher than the previous standard rate. The party remains vague about the specific amount. A gradual increase is planned in the coming years. It starts with a plus of 50 euros per month . Sanctions are to be completely abolished.

4. FDP

The Liberals are embedding the reform in a major project. Hartz IV, together with basic security in old age, assistance with livelihoods and housing benefits, should be part of a citizen’s allowance, which differs from the SPD citizen’s allowance. At the FDP, a uniform set of rules should apply to all of the areas mentioned, thereby simplifying the bureaucratic effort. The amount of additional earnings and the savings should increase. In addition, the Liberals are planning wage subsidies for companies that hire citizens’ benefit recipients.

5. Left

The party is uncompromising. You want to abolish Hartz IV completely. Instead, a sanction-free minimum income is to be introduced, which cannot be reduced by the state and to which asylum seekers and EU citizens are also entitled. In order to make the transition possible, the Hartz IV standard rate is to be raised to 658 euros in the short term until the new system is introduced.

Citizen's benefits

Are the Citizen’s benefits the same as universal basic income?

Not really!

1. Unemployment benefit II (Hartz IV)

The unemployment benefit II (short Alg II or ALG II, colloquially usually Hartz IV) is in Germany, the basic security services for working-age beneficiaries after the Second Book of the Social Code (SGB II). It is intended to enable beneficiaries to lead a life that corresponds to human dignity. However, it can be reduced by a maximum of 30% through permissible sanctions (punitive measures). The subsistence level is not unconditionally paid.

What are the Hartz IV sanctions?

Hartz IV sanctions are benefits reductions for certain breaches of duty. Such reductions in benefits can be imposed if the ALG II recipient refuses, despite prior instruction about the impending legal consequences,

  • to develop and prove appropriate personal efforts after the conclusion of an integration agreement,
  • to take up or continue a reasonable job, job opportunity (including job creation measure) or training
  • or if the beneficiary breaks off a reasonable educational measure or is responsible for breaking it off prematurely (e.g. in the event of repeated and unexcused absence or gross disregard of the teaching or company regulations).

2. Citizen’s benefits

Unlike the Hartz IV, Citizen’s benefits abolition of the Hartz IV sanctions completely. The SPD has rejected the sanctions of more than 30 percent as part of its manifesto.

The Citizen’s benefits address the social rights of citizens and aims to reduce or eliminate pressure that the sanctions have always exerted on the individual putting a strain on the relationship between the welfare state and the people.

“People should be able to participate – that is the basic message of our concept. That is why the value of work is at the center of it. Our answer is not an unconditional basic income. We want to guarantee good work. This also includes raising the minimum wage “in the future to 12 euros” and introducing a “right to mobile work and home office”.


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